Seaside Boats currently earns $4.00 per share and has a retention ratio of 75%. It is expected to have a constant growth rate of 5 percent per year. The required return is 15 percent. What is the intrinsic value of this stock?
A) $10
B) $10.50
C) $40
D) $42

Question

Quizplus · Accepted Answer

The Answer of Seaside Boats currently earns $4.00 per share and has a retention ratio of 75%. It is expected to have a constant growth rate of 5 percent per year. The required return is 15 percent. What is the intrinsic value of this stock?
A) $10
B) $10.50
C) $40
D) $42

Seaside Boats Currently Earns $4